The excess of issue price over par of common stock is termed a(n)
A) discount
B) income
C) dividend
D) premium

Question

Quizplus · Accepted Answer

The excess of issue price over par value of common stock is called a premium. It represents the amount by which investors are willing to pay above the par value for a share of stock. This premium reflects the perceived value of the company, its financial strength, growth potential, and market demand. A discount, on the other hand, is the opposite of a premium and represents a price below par value. Income and dividends are unrelated to the issue price of stock.

The Excess of Issue Price Over Par of Common Stock